It’s a good thing Microsoft has a ~$13 billion inside line on the future of generative AI, because “back” here in the present day, revenue growth is slow indeed.

Sales of $52.7 billion grew just 2% YoY during fiscal Q2, the company said on Tuesday afternoon in the US. That was much slower than last quarter’s 12-month rate, which was itself the most tepid in years.

On a constant currency basis, sales grew a more respectable 7%. Consensus expected $52.93 billion in revenue.

“The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” Satya Nadella declared, skipping right to what counts for the company these days.

In October, Nadella emphasized his dedication to investing in “secular growth areas.” The company’s $10 billion investment in OpenAI, the seven-year-old lab behind online chatbot sensation ChatGPT, came atop an existing $3 billion stake in the San Francisco-based company, which began as a nonprofit and counted Elon Musk among its founders.

The announcement of Microsoft’s latest investment in OpenAI came just days after the company tipped 10,000 looming job cuts, joining the ranks of Alphabet, Amazon and Meta among mega-cap US tech firms reducing headcount to cope with cost pressures and a more challenging economic environment.

“We are focused on operational excellence as we continue to invest to drive growth,” Amy Hood said Tuesday.

She went on to tout cloud revenue of $27.1 billion. That topped estimates, albeit not by much. Microsoft’s commercial offerings “continue to drive value for our customers,” Hood continued.

Productivity revenue was a beat at $17 billion, while personal computing sales of $14.24 billion were short of estimates, and down 19% YoY (-16% on CC basis).

Azure sales, which investors watch obsessively, rose 38% in constant currency terms. That came as a relief — initially. The company tipped a further deceleration in the pace of Azure revenue growth last quarter. 38% was a 100bps beat to that guidance.

Microsoft is “a huge deal for the earnings narrative and particularly Azure guidance, where they have to come in around 30% and up to keep this Nasdaq / mega-cap tech euphoria going,” Nomura’s Charlie McElligott said.

Later, during the call, Microsoft confirmed that Azure will slow further going forward to the chagrin of the shares, which erased late gains.

Plainly, a lot hangs on the outlook for big tech this earnings season, and while the Azure beat from Microsoft was a decent start, the guidance revived fears of a “cloud” storm, if you will.

Barclays called the results “better than feared given the nervousness in the market after the recent restructuring and CEO comments,” and the company knew just what the market wanted to hear. “Cloud Strength Drives Second Quarter Results,” read the title of the earnings release.

But in the end, the market found cause to fret in the guide. How it plays out Wednesday will be an early read on what to expect in the event Microsoft’s mega-tech peers adopt a cautious cadence on their respective calls.